Rather than trying to time the market based on election results, ABHIJIT BHAVE, managing director & chief executive officer at Equirus Wealth, tells Puneet Wadhwa in a meeting that investors should focus on their long-term investment objectives and maintain a diversified portfolio. Edited excerpts:
Have your ‘wealthy’ clients loosened their purse strings now or are they skeptical about the market outlook?
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How has the wealth management landscape changed over the last few years? Do you have to go the extra mile to retain and make new clients?
The wealth management landscape has undergone significant changes in recent years, driven by technological advancements, regulatory reforms, and shifting client preferences. Clients now demand more transparency, personalised advice, and digital access to their investments. To meet these evolving needs, our firm has invested in cutting-edge technology, expanded our suite of wealth management services, and strengthened our client engagement initiatives. Indeed, by going the extra mile to deliver tangible, incremental value-addition to our clients, we have been able to retain existing clients and attract new ones.
Typically, what are the margins that a wealth management firm enjoys, and do you think this will come down as the industry becomes more competitive?
Traditionally, pure wealth management firms used to enjoy 2 per cent revenues on total assets. With various regulatory changes, revenue streams from most of the investment products distributed by wealth management firms have moved down. In addition, most revenues have also moved from an upfront basis to trial basis. Typical average yields on total assets have now moved in the band of 0.75 per cent to 1 per cent. In the coming years, these are expected to come down to the range of 0.50 to 0.75 per cent.
How should the investors play the ‘election theme’? Do you expect a stock market correction ahead of the poll outcome?
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Amy possibility of a rate cut in the US in the calendar year 2024?
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Do you think that most investors are now in the markets, or most asset classes, to make quick money rather than create wealth, which is a longer-term commitment to investing?
Yes, there is evidence to suggest that some investors are getting increasingly focused on short-term gains rather than long-term wealth creation. This trend may be driven by factors such as market volatility, social media influence, and the proliferation of trading platforms. Enough emphasis should be laid on fundamentals of asset allocation, risk management, and personalised investment solutions so that investor portfolios are aligned with their broader financial goals while remaining in line with their risk-taking abilities.
First Published: May 03 2024 | 10:10 AM IST